Asus Likely to Release Xbox Handheld in 2025—Collaborating with Microsoft to Integrate Windows and Xbox Libraries

Late last year, Phil Spencer, CEO of Microsoft Gaming, mentioned that an Xbox-themed gaming handheld was still a distant dream. However, that doesn’t mean other original equipment manufacturers haven’t taken on the challenge with Microsoft’s blessing. Inside sources from The Verge reveal that Microsoft is on a mission to merge Xbox and Windows into a unified platform with Asus emerging as a key partner in this endeavor. Asus is reportedly working on what’s internally referred to as Project Kennan—a gaming handheld potentially set to benefit from Microsoft’s innovations, possibly hitting the market within this year.

Microsoft, on its part, is developing Project Bayside—a framework designed to create a consistent Xbox user interface across various devices. This software will power the handheld device being crafted by Asus, essentially Windows with an Xbox flair. Project Kennan and Bayside symbolize Microsoft’s aim to blend the strengths of Xbox and Windows, offering gamers a seamless experience.

Earlier this year, Jason Ronal, Microsoft’s VP for Xbox gaming devices and ecosystem, indicated to The Verge that the company’s focus is laser-sharp on this integration, with anticipated breakthroughs this year. Yet, despite the buzz, there hasn’t been any official word or teaser from Microsoft or Asus to confirm these speculations.

The handheld gaming scene saw a revival with Valve’s Steam Deck launch in 2022, fueling interest in portable gaming consoles. Microsoft, however, still maintains an edge over Steam Deck, given that most top-tier PC gaming handhelds are running on Windows 11. But change is on the horizon. Lenovo recently unveiled the Legion Go S, slated to run on SteamOS. Priced at $729 with Windows 11, the SteamOS variant, expected in May, will be a more budget-friendly $499. In the same month, Lenovo aims to release a cheaper Windows version for $599, though the $100 difference might push gamers towards the SteamOS option.

These shifts are unlikely to escape Microsoft’s attention, especially as one of its major OEM allies introduces a popular OS alternative this May. It signals that Valve is ready to challenge Windows with SteamOS. Already feeling the heat from the PlayStation 5 in the home console rink, Microsoft would likely not want Valve shaking things up in the handheld world. To safeguard its market territory, it seems imperative for Microsoft to craft a strategy ensuring Xbox and Windows continue to capture gamers’ hearts and devices in the handheld arena.